Fitness Center Feasibility Study in Alabama

Fitness is a top borrower class in Alabama

Within Alabama, fitness centers rank 4 of 39 among classes, a high place for a trade that ranks the state only 31 of 54 nationally. Alabama approved 106 SBA fitness loans worth $49.3 million in FY2017 to FY2026; at 1.18x, its location quotient shows gyms taking a larger slice of Alabama's SBA activity than of the country's. The median Alabama fitness loan is $309,800, 1.19x the national gym median, a little above the national figure, and none of the gauges separates Alabama clearly from the benchmarks.

Franchise gyms and development companies

Franchised gyms make up 34.0% of Alabama's loans, with Alabama approvals running $164,400 to $518,075 across the central half, a band that fits branded studio build-outs and equipment packages. SBA 504 carries 23 approvals beside 83 under SBA 7(a). Southern Development Council holds 9 of the 504 loans for $3.8 million, Birmingham Citywide Local Development Company 7 for $6.0 million, with 5 worth $2.6 million at Florida First Capital Finance Corporation, Inc. The Huntington National Bank leads 7(a) holders with 12 loans for $3.9 million; Peoples Bank of Alabama's 5 loans total $5.4 million while Wells Fargo Bank National Association's 5 total just $212,700. Jefferson County has 31 approvals and Madison 26, with Baldwin well behind at 9.

Losses that came after year five

Alabama's gym record has an odd shape. Among the 49 Alabama fitness loans that funded over FY2017 to FY2021, 8.2% or more are charged off to date, yet the share charged off inside five years of approval is 0.00%, so every Alabama gym loss arrived late. Alabama's gym cancellations come to at least 10.4% of approvals made in FY2017 to FY2024, with a ceiling that also reads 10.4%. The cohort is small, and the figures are floors.

Late failure means an Alabama fitness study must reach well beyond opening day. Demand should be measured as paying members the site can hold, within the drive time members will accept, against the franchise and independent gyms already there and those likely to follow. Cost must include equipment, the build-out to the brand's standard and the replacement cycle for machines. Debt service coverage should be stressed in later years for attrition and for re-equipping, not only for the ramp. Where the loan finances property, the appraisal must show what a gym building is worth to another tenant.

Alabama fitness centers need no coding caveat in this data. The Alabama numbers count SBA-guaranteed loans alone, list lenders as the current holders SBA reports, and give rates that are floors on a book still open.